Evening star. [volume] (Washington, D.C.) 1854-1972, 1887-12-31
THE PACIFIC RAILROADS.
Points srosa the Majority and Minority
Reports Of the COmmtsston.

SaotS uhVs0 tut 'hayOHssy 49,
Reports Of the COmntsston.
The reports OF the Commissioners appointed by
the President TO investigate the books, accounts,
and methods OF the Pacific railroads have been
uisde public The majority report Is signed by
M.ssrS Little and Anderson IL discusses at some
ls-ngth the relation between the Union Pacific and
its branch lines The almost Unanimous voice OF
all the witnesses examined, the report says, de-
clares that the branch roads add largely to the
earning power OF the Union Pacific Railway. Many
of them go far as 70 assert that without these
feeders the Union Pacific would be bankrupted In
few years II appears from the account OF these
branches that having regard only 10 the operation
u the branches themselves some CT them do not
pay the expense " operation. Many OF Them do
not earn enough 70 pay Interest on cost In an IL
ton 10 the expense OF operation. and only few OF
psnses and nxed Charges. But Ghe Onicers OF the
road and many other Intelligent witnesses declare
thai THIS circumstance has no bearing on the ques
ZION whether the branches are or not advan-
ta2e. They assert that, In addition to tine actual
earnings derived from local operation, there Is a
large pronL derived from the earnings OF ali bust
hess interchanged between the branches and the
NAN ROAD by reason Of the haul over the main
IoaQ. IN the opinion OF the commission this state
hehi u CORRECT AMI the argument unanswerable.
Ille actual value Of the system Is put at $780,
10000; ayerag. net earnings during the past two
years, y. soo,OOO, Of which ss,OOO,OO0 should &c
Credited 10 the parent line. The report goes into
the Diet ali Of the funded debts OT ne road, and
aids that it II universally coucedet by every in-
teungent person who has studied the subject that
the Union Pacific Railway proper It's system
Cannot pay the Indebtedness 20 the United states
AZ maturity. IL was decided therefore, "to sub
NIT scheme which shall secure 10 the United
states fuil pay ment Of all debts due IL from SAID
coinplny, with reasonable late Of interest, hay
Ing due regard to the financial ability OF said CON-
piny and the proper conduct u Us business In
saeh manner a. shall arord efficient service TO
the public"
MAJORITY RECOMMENDATIONS
The majority fayors the ufty-years' extension
scheme proposed 10 be applied TO the Union Pa
enc, the Central Pacific, the Central
Branch Union Pacific. and the Sioux City
ana Pacific RsilrOad companies. This scheme
haxes substantially the same requirements
Or the four roads In all important particu-
ars, except that, In Case OF nOn-acceptdnce OF The
prescriped terms The Central Pacific Co. and the
SIOUX city and Pacific Co. are required TO pay to
the Government ali the net earnings OF their sub
sdized roads, and the central Branch Union Pa
cc % per cent, against only 40 per cent Tor the
lniOh Pacinc. Tie proposition To adjust the In
debtedness Of the Union Paciiic when may lie
ta.en as a sample Of the others, provides that the
secretary OF The Treasury shall first ascertain the
Indebtedness OF the roads, and that the company
the principal and Int Fest Of the bonds one
trustee shall De appointed by the President and
e,mpanv can ,sl. onS nl ~ siI, Go1 ..S 30 the
amount OF It's debt payable nifty years after the
lst OF July, lsss. Inc bonds shall bear interest
at . per cent per annum The mortgage Is 10 pro-
Vide that In "a. fault of the payment or interest
the entire debt shall then Immediately mature, at
tue OptlOn vi the United states. IL Includes Tie
establishment OF SINKING Iund. The existing
statutory lien OF the United States Is continued i'll
fun a. security for the debt due 10 tine United
States No dividend shall W declared except out
oI actual earnings and after all interest mas been
piic, and shall md be over per cent The coin
piiy may AT any time take up all or any part or
the Debt Ia advance. II the road refuses 70 accept
the ;erms oI the bill there shall be collected from
u ~ per cent vi Its annual earnings.
THE MINORITY REPokT.
Mr.. PattiSon makes a vigorous minority report,
arraigning The railroads In emphatic language.
lie Calculates that the total aid, including grants
OF subsidy bonds, lI.is. etc, EXTENDED TO the six
companies was follows:
Union Pacific and Kansas Pacific. .s241 ,696, .O7
SIOUX CiIy aad Pacific. ......... i0.04s' $50,
central Pacific anu Western Pacilc. Isl ,OosI W
s447, ,47o54
The cost OF the road, Ii is pointed Out, less
than ssoOc1OO0 AMI yet bonds and stocks were
Out That Ia re,uTn Tor the advantages Afforded by
the Government 10 the roads, Congress enacted
that the companies should bind themselves 10
have their stock July paid Ia cash; that they
should build nrst-claSs roads: that they should
carry for the Government at fair and reasonabie
rttes, not exceeding the amount paid by private
parties Tor the same kind Of service; that they
would operate ali the lines u the Pacific system
- one connected cOntiauOus line, aTordng TO
each of the other equal facilities as 10 rates
TINE and transportation, and 70 convey Geographic
Messages upon equal terms for all persons. They
were also required 10 make sworn annual reports
showing the AMOUNT or STOCK actually paid in, and
Information relating 70 their financial operations
SHARP CRITICISM OF THE ROADS.
The commissioner assert that nearly every
obligation which these roads assumed under the
laws OF the United states or as common carriers
has been viola ed. and he arraigns the roads in
the following language: Their management has
been a national disgrace. sine the date OF their
inception they have been conducted upon purely
speculative basis. Their permanent prosperity
has been lost sight Of. while their managers
sideS ccaOsees eemPIped W aaan5 Ga6ers the
tax the communities which they serv d, and
tA-y forced the consuming classes In all sections
oil he country 10 contribute TO the payment OF
interest and dividend upon the fictitious capital
which they had created They increased the cost
OF living They laid proprietary claim 10 the trafric
OF large sections OF the country. They squandered
millions OF their money 10 protect their terrific
nal Claims, while expanding other millions In en-
crOachnientS upon the territory claimed by other
COMPANIES They constituted themselves the ar
biters OF trade They attempted TO dictate the
channels that trade SHOULD follow and To fix rates
OF transportation that were extortionate They
charged all that the traffc would bear and apprt-
priaed share OF the profits Of every industry by
charging the greater part OF the difference be-
tween the actual cost OF production and thu price
OF the article In the market They discriminate
between individuals, between localities and
between articles They favored particular
individuals and companies They destroyed
possaole competitors and they built up particular
matters had reached such pass that no man
dared engage In any business In which trans
portatOn largely entered without first soliciting
and obtaining the permission VI a railroad man
ager. They departed from their legitimate sphere
as common Carriers. anu engaged In mining
articles for transportation over their own lines
They exert-d a terrorism over merchants and over
communities, thus interfering with the lawful
ton contests by secret cuts and violent and rapId
fluctuations In rates they menaced business, par
atLed capital, and retarded investment and
development"
ALLEGED ovERcHARGKs
The report says further that the COMPANIES have
oyerchaTged the Government 100000 for the
transportation OF troops lie gives figures TO show
taat they nave made a net PROFIT OF s.s7s Or, AZ
ieIates, anu TefundS OF variou, sorts Which
amount was deducted from their gross earnings
before the latter were reported TO the Govern
Llcnt- he asserts thai Messrs. Stanford UuutIn.r
ton, Hopkins and Croker, throug h contracts maze
by themselves with themselves, divided bet w.en
them sl+. 900 In cash and securities anu tllI
three VI tlc,e directors nfIeen months ago by de-
cllins 10 build an extension Of the California aud
oregon division OF the Central Pacific Railroad
personally pronted by their own votes Dy that SIN,
Sle transaction TO the extent OF 81. :ssi ,:39l
EyADING LOCAL TAXATION
II Is also charged that the roads have repeated
y evaded local taxation, and In one case 500 Oov
acres OF land were Sold patents for which the road
lad never even applied for Had the Pacific Rail
roai II Is asserted been honestly managed: dlvi-
oends OF % r cent per annum for eighteen wears
could have been declared upon all the moneys that
they would have been required To pay an 10 com,
pete anu equip the roads. Iney wound have owned
2,i.kj miles vi rUdd free all deDt AMI Wort
tl24.6O,OUO, upon an original outlay OF less than
xki,+ssD..ssl.44, and three OF them the linton
faclne, Central Pacific and Central Branch. could